An economist for the people

Gareth Hutchens

In the late 1880s, Tim Harcourt's great-grandparents used to sail a boat down the Darling River delivering goods to general stores.

Harcourt's great-grandfather, Israel Harkowitz from Transylvania, called the boat The Wandering Jew.

It was a smart enterprise. Harkowitz and his wife Dinah soon set up most of their family with their own stores in Orange and Bathurst and Lismore.

They left it behind to settle in Sydney. It was there that one of their sons, Kopel Harkowitz, Harcourt's paternal grandfather, became a Bondi Iceberg.

But to join the surf club Kopel had to change his name.

"He tried to get in as Kopel Harkowitz and couldn't, so he changed his name to Ken Harcourt,'' Harcourt says.

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"He later became a professional punter with his brother Sam. They had a radio show called The Racing Harcourts where they toured Australia, punting. They ended up in Melbourne, and that's where my dad was born."

The story of Harcourt's Jewish grandfather changing his name to become an Iceberg has become a well-known one, because Harcourt tells it often.

But it's an important story for the former chief economist of the Australian Trade Commission (Austrade). He's proud of the mix in his ethnic heritage, and he enjoys the ironies buried in the skin of Australia's cultural history.

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''In 1850, one in nine males in Australia were Chinese, because of the gold rush,'' he says.

''So they put a tariff on every boat if you had Chinese labour, to make the boats too expensive to land. They effectively used tariff protection to keep Chinese people out. It was inherently racist. I now tell my Chinese daughter about the important contribution the Chinese people have made to this country.''

(Harcourt and his American-born wife, Jo, have an adopted daughter, Yun Shi. And they once discovered their Chinese neighbour in Sydney had ancestors who bought the Harkowitz's general store in Lismore).

Talking to Harcourt, one gets a sense that the world is a small and fascinating place, that it's common to cross paths or share acquaintances.

It may be one reason why he is an economist. The idea that things are connected and interdependent, a basic one in economics, comes instinctively to him.

But more would have to do with Harcourt's father, Geoff Harcourt, the famous left-wing ''post-Keynesian'' economist, who knocked around at the University of Cambridge in the 1960s with pupils of John Maynard Keynes. (Harcourt snr, 80, has just returned home with his wife, Joan, 78, after teaching for 28 years abroad. He now has an office at the University of NSW, down the corridor from his son).

Harcourt says he was influenced by both parents. His father was politically active in the 1960s and '70s, taking risks to oppose the Vietnam War, filling the house with trade unionists and draft dodgers. Joan ran as a political candidate for Labor in 1968 in South Australia.

''Don Dunstan [the then premier of South Australia] was getting more women to run and mum ran when she was six months pregnant with my younger sister,'' Harcourt says.

"She'd go to a press conference and they'd say, 'You're pregnant, what are you going to do if you win?' She'd say, 'I'll have the baby, what am I supposed to do?'"

Harcourt remembers his parents' activity aroused contempt in political opponents.

''Our family had death threats in that period while we were living in Adelaide. My dad was abused on the steps of Parliament House by members of an anti-semitic fascist group. Someone tried to blow up the family Holden.''

But Harcourt looks back on that time with fondness. At a young age he was interested in politics and the labour movement, following his father to political rallies at the age of 10, and accompanying him, at 13, when his father was a witness for the South Australian Trades and Labor Council in the state wage cases.

That's one of the reasons he joined the ACTU in his early 20s, which is where he met the present crop of Labor leaders - Bill Shorten, Greg Combet, Stephen Conroy - who were running unions or getting involved while in their 20s and 30s.

He also went to the same school as Julia Gillard, with whom he remains friends.

That's one thing that sets Harcourt apart from other economists. His economics emphasises open trade and workers, rather than just the former.

"The orthodox economics view is that you get rid of tariffs and you deregulate the financial market, then your next logical step is to get rid of unions, to get rid of the arbitration commission, to just have one-on-one bargaining. That's what you're seeing currently in the debate,'' he says.

"Well, my view is tariffs were bad for workers and farmers and manufacturers, so they had to go, and we have to do things to the financial sector and so on. In the labour market, things have to be flexible and efficient, but you don't want to take away people's rights.

''One-on-one bargaining might work for Shane Warne but it won't work for the rest of us. I think the debate's about protecting workers, not markets. That's the distinction, and that's probably where we differ.''

Harcourt says he loved travelling to scores of countries for Austrade.

He suspects he inherited his love of travelling from his maternal grandfather, Edgar Bartrop, who worked as an adviser for Ben Chifley during World War II.

"I think I get this travel bug from him. He went on a plane before anyone ever did, working for Chifley,'' Harcourt says.

''After the war, Edgar went back to his home in country Victoria and set up the International Real Estate Agents Association, where he put in the constitution that the president and the president's wife get a free trip, so he ended up going to about 100 countries. That was at a time when air travel was pretty unusual, so he worked it pretty well," he says with a smile.

"He also had a map in his den in Ballarat with pins to show where in the world he'd been. I used to look at that and go, 'Wow! I want to do what he does.'"

Harcourt hasn't worked things exactly that way. But his role as the chief economist at Austrade allowed him to travel to more parts of the globe than most people, and certainly most economists.

The name of his popular economics book, The Airport Economist, says it all. (On the book's title: some guy in America who calls himself ''The Airport Lawyer'' apparently wrote to Harcourt accusing him of ripping off his name. "He said he was going to sue me," Harcourt says).

But it's a double entendre, a play on his experience as a travelling economist and on the name used to brand a particular type of economist in the 1970s, those such as the late Milton Friedman.

During the ravages of inflation and economic stagnation in the '70s, the ''airport economists'' were sent to far flung parts of the globe to instruct dissimilar countries on how to run their economies, basing their "advice" on the same playbook of ideas: use monetary policy to fight inflation, balance the budget, reduce the size of government and deregulate financial markets.

Harcourt draws attention to this fact in the beginning of his book. He's keen to talk about the heady mixture of economics and politics, the real stuff that grinds history forwards.

And he's good at it. Effortlessly, it seems, he can recall key moments in Australian history, the political absurdities, expediencies at the time, that lay the groundwork for the country's future political institutions.

"I find it amazing, for instance, that NSW Labor and the trade unions 100 years ago were free traders and the Victorians were protectionists. But when we federated, Alfred Deakin did a deal, to get protection up, where he gave arbitration to the opposition,'' he says.

''So George Reid and the free trade coalition got rolled by the protectionists. What would have happened if it had gone the other way? We might have had a free trade labour movement for 100 years, who knows?''

That's one of the reasons the University of NSW has signed him up as the J.W. Nevile Fellow in economics with their Australian School of Business. They want him to become the Dr Karl of economics, someone who can promote economics in an interesting way.

The university wants him to use the airport economist brand to promote economics through Australia and Asia, and to promote the Australian School of Business in emerging markets in Latin America and Asia.

Harcourt's thrilled to do it. ''Dr Karl's fantastic. He makes science interesting and accessible. A lot of people will go to Sydney Uni because Karl will teach the first lecture. I want to do the same thing.''